Daimler buys 10 percent stake in Tesla

May 22, 2009 Daimler AG has announced the acquisition of almost 10 percent of fledgling Californian EV producer Tesla. The deal, which should help Tesla meet its planned 2011 launch date for the Model S sedan, is the latest news in an ongoing relationship between Tesla and the German automotive giant which also includes a previously announced agreement to supply lithium-ion battery packs in the first 1,000 units of Daimler’s electric smart car.

Daimler's acquisition will see further collaboration on battery systems, electric drive systems and in individual vehicle projects. Prof. Herbert Kohler, Vice President E-Drive and Future Mobility at Daimler AG, will take a seat on Tesla’s board of directors.

“Daimler has set the benchmark for engineering excellence and vehicle quality for more than a century. It is an honor and a powerful endorsement of our technology that Daimler would choose to invest in and partner with Tesla,” said Tesla CEO and Product Architect Elon Musk. “Daimler is also on the leading edge in the field of sustainable mobility. Among others the lithium-ion pouch-cell battery developed by Daimler and especially designed for automotive applications is of interest to us. We are looking forward to a strategic cooperation in a number of areas including leveraging Daimler’s engineering, production and supply chain expertise. This will accelerate bringing our Tesla Model S to production and ensure that it is a superlative vehicle on all levels.”

It hasn't all been smooth sailing for Tesla with plans for a new facility in San Jose put on-hold indefinitely, but the company is still the only production automaker selling a highway capable fully electric vehicle in North America and Europe - the USD$109K Roadster

The planned Model S due out in 2011 will be targeted at a broader consumer base, costing around $50K after tax rebates.

Daimler is due to start production of 1,000 units of the second-generation smart fortwo with electric drive later this year. A small-series production of the fuel cell drive Mercedes-Benz B-Class with a system is also scheduled for this year and in 2010 the first battery-powered Mercedes-Benz will hit the road. As of 2012, Daimler plans to equip all smart and Mercedes-Benz electric vehicles with own produced lithium-ion batteries.

No dollar figures were released on the acquisition, but reports have it in the (not very specific) double-digit-million-dollar region.

After a misspent youth at law school, Noel began to dabble in tech research, writing and things with wheels that go fast. This bus dropped him at the door of a freshly sprouted Gizmag.com in 2002. He has been Gizmag's Editor-in-Chief since 2007. All articles by Noel McKeegan